Consumer Theory
Definition
Consumer theory is the study of how individuals make decisions about what goods and services to consume, given their limited income and preferences.
Related terms
Utility: Utility refers to the satisfaction or happiness that individuals derive from consuming goods and services.
Budget Constraint: The budget constraint represents the limit on a consumer's consumption choices due to their limited income.
Marginal Utility: Marginal utility measures the additional satisfaction gained from consuming one more unit of a good or service.
"Consumer Theory" appears in:
Study guides (2)
AP Microeconomics - 3.1 The Production Function
AP Microeconomics - 3.5 Profit Maximization
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About Us
About Fiveable
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CCPA Privacy Policy
Resources
Cram Mode
AP Score Calculators
Study Guides
Practice Quizzes
Glossary
Cram Events
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Crisis Text Line
Help Center
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.